T-Mobile’s contract hit in Q4

T-Mobile’s effective withdrawal from the Christmas contract market lost the company thousands of contract customers at the end of last year.

The operator lost 57,000 contract customers in the final quarter of 2007 because it was forced to pull back sharply from the market, having spent lavishly on commissions to acquire new customers earlier in the year.

The network released its customer growth figures for 2007 this week, which showed that it had increased its contract base by 165,000 to 3.9 million for the whole year and its prepay base by 241,000 to 13.4 million.

However, T-Mobile acquired 222,000 new contract customers in the first three quarters of the year, but lost 57,000 in the final quarter.

In contrast, the network lost 124,000 prepay customers in the first nine months of 2007 before gaining 365,000 in the last three months of the year with aggressive prepay subsidy policies.

Mobile understands that retailers and independent dealers alike had been told there was no budget left to acquire new contract customers.

A T-Mobile spokesman said: ‘We were always going to see a relatively high churn in Q4 because of the huge number of contract additions we had 18 months previously following the launch of Flext.

‘Having said that, we are happy with the retention levels we achieved on contracts.’

One city analyst told Mobile: ‘It is the first of the networks to release its figures for last year, but on the face of it they do not look good at all.

‘Christmas is a vitally important period and T-Mobile lost contract customers during that period.’

But other experts warned it was too soon to assess the extent of T-Mobile’s figures until other operators released their own. One said: ‘It was a very slow mobile market last year. We need to see how rivals have performed to see how
T-Mobile has fared.’

This is the second year running where T-Mobile has been forced to pull back from contract at the latter end of the financial calendar.

Coincidentally, T-Mobile appointed a new finance director in November. Lars Nordmark was brought in from T-Mobile Austria where he was chief financial officer, replacing Johannes Schmidt-Schultes who left T-Mobile UK to join Australian operator Telstra.